We have reached an expiration date on the current linear economic system that throws valuable resources away.

When did we stray so far from the common sense value of not wasting? Until the 1950s, people designed products to be proud of their quality and durability. Repair services were a given; a tailor would risk reputational ruin if their clothes had to be tossed after one wear.  During the first and second World Wars, recycling was viewed as a patriotic duty. Recycling and reuse were championed. Rubber, metals, textiles, and cooking fats, among other things, were essential to the war effort. And so Americans rallied.

Today, rather than continue to evolve towards conservation and resource efficiency, we seem to devolve into a world of waste and pollution. Approximately 50% of all food produced in the U.S. is thrown out, and food waste is the biggest occupant in American landfills, costing taxpayers billions in landfill disposal fees. Americans throw out 80 pounds of clothing each year. And about 90% of plastic waste ultimately ends up in a landfill or incinerated. The statistics go on, but the loss of these resources has a double sting: there’s a hefty price tag attached to all this waste and dire implications for our health.

A throw “away” culture, while financially beneficial to companies that extract natural resources like oil and mining companies and landfill operators, causes a massive financial hardship to municipal budgets. Landfill tipping fees per metric ton can exceed $100 in the United States and landfills are the third largest source of methane emissions in the world. Ultimately, these costs are paid by taxpayers and municipalities.

The materials we pay to landfill are often valued commodities. Plastics, paper, textiles, and metals can be reused, repurposed, and can re-enter manufacturing supply chains. The recycling industry is a powerful engine in the economy; in 2018, the industry created over $110 billion in economic activity, 534,000 jobs, and $13.2 billion in tax revenues for governments across the country. Only 30% of what can be recycled in the United States is recycled due to a lack of recycling and circular economy infrastructure in many parts of the United States. That means that there is an opportunity to 3x the already substantive jobs and economic value created by the recycling industry.

Given all of this, why are we still following a linear economic model that culminates in wasted resources? Over time, a number of different forces have contributed to the current state of play. In the 1950s, there was a marked shift away from the “waste not, want not” approach to life, replaced instead by a feverish post-war consumption boom where status came to be defined by the quantity of products consumed as opposed to the quality of products produced.

By 1960, the prevailing indicator of the health and success of a country was its gross domestic product – the total value of goods and services provided – rather than attributes like quality of education, air, water, and green spaces, among other things. In the 1970s, economist Milton Friedman declared that the only responsibility of business is to increase profits, establishing the precedent of shareholder primacy which ignores and discounts other stakeholders like local communities and the environment.

While consumers, taxpayers, and the environment lose out in this current take-make-waste economy, extractive industries, like oil & gas and landfill owners win. But we can reimagine this system and an alternative does exist: it is the circular economy, and it’s gaining traction.

The circular economy represents the most significant restructuring of global commerce since the industrial revolution. It is an overhaul of how products are designed, manufactured, sold, consumed, refurbished and recycled, eliminating the concept of waste and keeping materials in circulation at their best and highest use. This new economic model reduces the need for the extraction of finite raw materials and the costly disposal of waste at landfills.

Today is the perfect opportunity to reflect on this shift, since recycling is a key enabler of the circular economy. On America Recycles Day, Closed Loop Partners is celebrating the potential of the circular economy to reimagine capitalism in order to reduce costs, increase efficiency, and protect the environment we share.

The circular economy is estimated to be worth $4.5 trillion globally by 2030. Large consumer goods companies are increasingly recognizing that the development of circular supply chains will reduce manufacturing costs and provide consumers with more sustainable products. Similarly, governments are seeing how local recycling and circular economy infrastructure reduce municipal disposal budgets, generate revenue and drive local job creation.  The transition to circularity will rely on collaboration across the entire value chain, including product designers, recyclers, manufacturers and brands. In doing so, we will align the interests of citizens, municipalities, industry and the environment we all share.

The NextGen Consortium, a pre-competitive collaboration managed by Closed Loop Partners in partnership with Starbucks and McDonald’s, accelerates towards a more circular cup system.

Contact: [email protected]

September 25 – NextGen Consortium Partners, investors, and other stakeholders convened during Climate Week in New York City for a Demo Day in which six participants in the NextGen Circular Business Accelerator showcased their manufacture-ready prototypes and pitch-ready business plans for growing their sustainable cup solutions.

The Accelerator follows Closed Loop Partners’ announcement of 12 NextGen Cup Challenge winners in February 2019. Six winning teams entered the NextGen Circular Business Accelerator, launched in partnership with global design firm IDEO to help companies further refine their cup solutions through rapid learning and iteration. The diverse solutions include cutting-edge plant-based materials, new innovative liners for cups, and reusable cup systems that redesign the fiber to-go cup so that it is more widely recoverable or remains in circulation for multiple uses. The six teams participating in the Accelerator are Colombier, CupClub, Footprint, Muuse, RECUP, and SoluBlue.

During the rigorous, six-month Accelerator program, companies accelerated their learnings through live in-context prototyping across four distinct Google campus locations, each housing multiple cafes. Progress for each cup solution was measured across four key categories: customer experience, server experience, performance, and disposal. Companies were able to see first-hand how customers and servers interact with their cups in a restaurant-like environment, capturing real-time feedback in a low-risk setting and identifying areas for refinement.

Companies also visited materials recovery facilities and explored the recovery side of the cup value chain, learning about the systems and infrastructure in place to ensure that their solutions are in alignment. Additionally, companies studied the value of materials recovered post-processing of their cups in order to make the economic case for more circular approaches.

Throughout the Accelerator, companies gained invaluable feedback through direct engagement with NextGen Consortium Partners, including founding partners Starbucks and McDonald’s, supporting partners The Coca-Cola Company, Yum! Brands, Nestlé, and Wendy’s, advisory partner WWF, and innovation partner IDEO. Feedback included insight into what it would take to roll out their solutions at a large scale.

“We are proud of the NextGen collaboration underway with so many companies championing greener cup technologies. We applaud Closed Loop Partners’ continued, on-track progress to determine what’s most viable, and we are excited for our own customers to try greener cups in our stores in the near future.”

John Kelly, senior vice president, Global Public Affairs & Social Impact at Starbucks

The companies were also welcomed behind the scenes of a McDonald’s restaurant to better understand how cups work within a store’s layout and staff operations.

“We were thrilled to have participants in the NextGen Circular Business Accelerator experience. Having these next gen solutions in our restaurants to see first-hand how our crew members manage through our restaurant operations is an important step. Compatibility with the fast pace of a QSR setting is critical, and it was great to see Accelerator teams jump at the opportunity to better understand these in-restaurant conditions. These cup solutions are helping shape the future of packaging, and we want to set them up for success while keeping valuable materials in circulation and, importantly, out of landfills and our oceans.”

Marion Gross, Senior Vice President and Chief Supply Chain Officer, McDonald’s USA

“Seeing how far participants in the NextGen Circular Business Accelerator have come is truly rewarding. The NextGen Consortium will continue to work with winning teams to ensure that when their solutions do enter market at scale they’re set up for success and recoverability.“

Kate Daly, Managing Director of the Center for the Circular Economy at Closed Loop Partners

The other six winners of the NextGen Cup Challenge, which are later-stage in their development, are working with the NextGen Consortium to identify in-market piloting opportunities in regions across the globe. Some participants in the NextGen Circular Business Accelerator are also expected to announce in-store pilots as early as 2020.

The Cup Challenge and the NextGen Circular Business Accelerator are just one part of the NextGen Consortium’s efforts to address single-use food packaging waste globally by advancing the design, commercialization, and recovery of food packaging alternatives. The Consortium is also focused on infrastructure and consumer engagement, supported by stakeholder collaboration across the value chain.

“Watching the aggregation of innovative ideas turn into real progress has been exciting to watch. Now we’ll look to the members of the NextGen Consortium to take these solutions into the marketplace and watch real change happen.”

Erin Simon, Director, Sustainability R&D, World Wildlife Fund

About NextGen

Each year, an estimated 250 billion fiber to-go cups are distributed worldwide. Most of these are not recyclable or compostable. The NextGen Consortium and Cup Challenge launched in 2018 to bring together entrepreneurs, industry, and recyclers to identify and commercialize the next generation of recyclable and/or compostable cups. Closed Loop Partners, Starbucks, McDonald’s, The Coca-Cola Company, Yum! Brands, Nestlé and Wendy’s invite the industry to join this effort to identify a global solution to this shared challenge.

About Closed Loop Partners

Closed Loop Partners is an investment firm that invests in sustainable consumer goods, recycling, and the development of the circular economy. Investors include many of the world’s largest consumer goods companies and family offices interested in investments that provide strong financial returns and tangible social impact.  In 2018, Closed Loop Partners launched the Center for the Circular Economy, a New York City-based collaboration center for innovators to commercialize products, services, and technologies that are leading the transition from a linear take, make, waste economy to a restorative one in which materials are shared, re-used, and continuously cycled. Learn more at www.closedlooppartners.com.

About McDonald’s

McDonald’s is the world’s leading global foodservice retailer with over 37,000 locations in over 100 countries. Over 90 percent of McDonald’s restaurants worldwide are owned and operated by independent local business men and women. This year McDonald’s announced a series of commitments demonstrating how it will use its Scale for Good to positively impact the planet and the communities it serves. You can read more about McDonald’s Scale for Good initiatives here.

About Starbucks

Since 1971, Starbucks Coffee Company has been committed to ethically sourcing and roasting high-quality arabica coffee. Today, with stores around the globe, the company is the premier roaster and retailer of specialty coffee in the world. Through our unwavering commitment to excellence and our guiding principles, we bring the unique Starbucks Experience to life for every customer through every cup. To share in the experience, please visit us in our stores or online at http://news.starbucks.com or www.starbucks.com.

NextGen Consortium Partners

With only 9% of the world’s plastics getting recycled and global plastics demand forecasted to triple by 2050, we’re in desperate need for tangible, investable solutions to avert a crisis. Where ten years ago, the urgent need to broach this subject was met with resistance, today the conditions are altogether different.

Across the globe, movements such as Break Free From Plastic and legislation like the EU’s Circular Economy Action Plan have galvanised the public. Shocking images of sea turtles maimed by straws or statistics about there being more plastic than fish in the sea by 2050 have struck a chord.

It’s clear we must rethink our current leaky, linear system and shift to something more circular. We need a system that’s consciously designed to use less materials in the production and delivery of products and that keeps materials in circulation at their highest value for as many generations as possible, if not infinitely. This way we can reduce our waste and our extraction of raw materials.

Sometimes plastic is the most appropriate material to serve a purpose, given its particular properties, other times it’s not. There is no silver bullet approach.   We need to invest in both near term solutions and long term solutions with clear paths to scaling to tackle the problem of ocean plastic pollution and reduce overall environmental impacts.

The good news: we’re already seeing clear, investable solutions that can shift us in the right direction.

There are at least 60 technology providers developing transformational technologies that purify, decompose, or convert waste plastics into renewed raw materials in North America, representing a $47 billion opportunity in North America alone. Many of these technologies mean there is no limit to the number of times plastics can be recycled, thereby helping us to shape a more circular economy for plastics.

Other companies are exploring innovative new delivery models or alternative materials science. Their outputs could supersede the need for plastic packaging altogether, whether through vending machines that dispense exact amounts of product into reusable containers like Algramo, new feedstocks replacing styrofoam packaging like TemperPack or through hyper-compostable, edible straws made of sustainably harvested seaweed like Loliware.

Large banks and brands are getting on board too, recognizing the need for change. Institutions like Goldman Sachs, Citi, Comerica Bank and Engie have co-invested in our funds in order to catalyze the development of the circular economy.

If we’re to stem the tide of plastic pollution in our oceans, it’s critical that we invest across the value chain and in companies that are rethinking the system for a more sustainable future. With the current enabling conditions, from policy to consumer engagement, now is the time to do it.

This blog was inspired by the discussion in Confluence Philanthropy‘s webinar on Exploring Investor Solutions to Restore the Ocean, which I participated in with Mark Spalding, President of The Ocean Foundation, Conrad MacKerron, Senior Vice President of As You Sow, and Angela Howe, Legal Director of Surfrider Foundation.

Start-ups from across the globe showcased their recovery technologies for a fast-growing category of hard-to-recycle flexible plastic packaging, and one winner was selected to join a mentorship program with the Sustainable Packaging Coalition & Closed Loop Partners.

CHARLOTTESVILLE, VA and NEW YORK, NY —  the Center for the Circular Economy at Closed Loop Partners and the Sustainable Packaging Coalition (SPC) have announced the winner of the FlexPack Recovery Challenge: ReNew ELP.

In October 2018, the SPC and the Center for the Circular Economy at Closed Loop Partners launched the FlexPack Recovery Challenge, an open competition for innovators, entrepreneurs, and start-ups to submit new ideas for reprocessing technologies capable of beneficially recovering multi-material flexible packaging waste.

Five finalists were selected by a panel of judges from the SPC and the Center for the Circular Economy at Closed Loop Partners staff, as well as with input from industry advisors. Each finalist participated in the SPC’s spring conference SPC Impact and presented to an audience of major brands, plastic manufacturers, and packaging suppliers, including members of the SPC’s Industry Leadership Committee on Multi-Material Flexible Recovery, on how their technologies can beneficially recover the embodied environmental investment within multi-material flexible packaging waste and can be scaled to provide meaningful solutions. These finalists included Cadel De-Inking, ReNewELP, Renewlogy, Synova-BioBTX, and Ekopolimer. Read more about all of our finalists.

Among the five finalists, ReNewELP was selected as the final Challenge winner. RenewELP will receive a free year of membership to the SPC and enter into a mentorship program jointly run by the SPC and Closed Loop Partners.

“RenewELP submitted a detailed,  transparent process description and market analysis. We were impressed with the processing capacity scale (up to  80,000 -100,000 tons per year in their initial facility) and the fact that their unique CAT-HTR technology allows for  mixed waste feedstocks, including paper, PET and organics. Their modular approach considers variable material costs in different markets and their end markets for diverse hydrocarbon products like oils, waxes, and chemicals represent large market potential. RenewELP is a great fit to participate in a mentorship program run by our organizations,”

said representatives from the SPC and Closed Loop Partners in a joint statement.

The SPC & The Center for the Circular Economy at Closed Loop Partners team followed up with Richard Daley, Managing Director of RenewELP, for a post challenge interview.

Read the Q&A with Richard here

The SPC and CLP believe that all of technologies presented by the Finalists represent the kinds of diverse solutions needed for recovery of flexible packaging. We look forward to staying in touch with all the finalists and tracking and promoting their progress.

Learn more about the FlexPack Recovery Challenge.

ABOUT THE CENTER FOR THE CIRCULAR ECONOMY AT CLOSED LOOP PARTNERS

The Center for the Circular Economy brings together industry experts, academic researchers, and entrepreneurs who are solving for today’s most pressing challenges in design and reuse, providing a collaboration center for innovators to commercialize products, services and technologies that are leading the transition from a linear take, make, waste economy to a restorative one in which materials are shared, re-used, and continuously cycled.

ABOUT THE SUSTAINABLE PACKAGING COALITION

The Sustainable Packaging Coalition is a membership-based collaborative led by an independent non-profit that believes in the power of industry to make packaging more sustainable. Using an objective life-cycle-based approach, we work in a constructive atmosphere to provide thought leadership and bring our members together to strengthen and advocate the business case for more sustainable packaging.

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.